I went with Bank of Janicewhokeepsmehumble. It worked out great. They even help with glue-ups.
I went with Bank of Janicewhokeepsmehumble. It worked out great. They even help with glue-ups.
Check with your utility about shop lighting rebates and free design services.
Bill D
That’s interest rate seems about right. Small business loans have significantly more risk. My previous commercial vehicle loan was around 8%. It’s a different world than consumer stuff.
If you don’t want to take on debt, you might consider taking on a business partner / investor.
Lots of options for structure. Pay back the amount borrowed plus the investors gets X% of the business. You can include an option to buy them out after Y years.
If you're saying you'd get a HELOC to fund the shop, you're saying you'll have equity, which means you're outright buying it so sounds like you have enough capital for one or the other. Imho, you're looking at it backwards. It's much easier to finance the property (as there's hard collateral for one) than a business, so finance the property, lease it to your llc and fund the shop with the capital you showed to the bank (your savings that would have purchased the property and also assets the lender will want to see) to get the loan.
Regarding construction loans, it's not universally true that you need an external GC. I've seen situations where folks managed to act as their own. It'll depend on the lender's specific policies and your negotiation skills.
Buying the property first and then financing the shop separately can give you more control over costs and potentially better interest rates.
Last year, my trucking business hit a rough patch, and I had to file for bankruptcy. During that time, I worked with a San Diego bankruptcy lawyer who helped me clear my debts and also assisted in getting me some competitive rates for my new venture's loan. Consider some help to negotiate a good loan for building your shop.
Last edited by Chris C.W. Berry; 09-18-2023 at 6:22 AM.
Be sure you understand the zoning rules in your area. Years ago when I was in the building business, tried to build a house with oversize garage planning to build the cabinets for the homes I built. The inspector told me I was not allowed to build cabinets for my homes is a home shop. Need to have a commercial zoned area for that. There is a type of zoning which allows that, but there was no land zoned right for that.